Information About Credit & How to Fix it
What are the main things that affect my score?
What is the best way to improve my credit score?
Who are the credit bureaus and how do I contact them?
Is it ok to max out my credit cards?
I paid off the collection agency, why is it on my report still?
Will credit counseling services pay off my debts?
What are the main things that affect my score?
Here are the factors considered when calculating your FICO score and an estimate of how heavily each factor might be weighted.
- Past payment history (35 percent): bankruptcies, late payments, past due accounts and wage attachments
- Amount of credit owing (30 percent): amount owed on accounts, proportion of balances to total credit limits
- Length of time credit established (15 percent): time since accounts opened, time since account activity
- Search for and acquisition of new credit (10 percent): number of recent credit inquiries, number of recently opened accounts
- Types of credit established (10 percent): number of various types of accounts (credit cards, retail accounts, mortgage)
What is the best way to improve my credit score?
- Pay your bills on time. Delinquent payments and collections can have a major negative impact on a score.
- Keep balances low on credit cards and other "revolving credit." High outstanding debt can affect a score.
- Apply for and open new credit accounts only as needed. Don't open accounts just to have a better credit mix -- it probably won't raise your score.
- Pay off debt rather than moving it around. Also don't close unused cards as a short-term strategy to raise your score. Owing the same amount but having fewer open accounts may lower your score.
- Make sure the information in your credit report is correct. It won't affect your score to request and check your own credit report. If you find errors, contact the credit reporting agency and your lender.
Who are the credit bureaus and how do I contact them?
The three major credit bureaus are:
Equifax
Order Credit Report: 800-685-1111
Report Fraud: 800-525-6285
http://www.equifax.com/
Experian
Order Credit Report: 888-397-3742
Report Fraud: 888-397-3742
http://www.experian.com/
Trans Union
Order Credit Report: 800-888-4213
Report Fraud: 800-680-7289
http://www.tuc.com/
Equifax
Order Credit Report: 800-685-1111
Report Fraud: 800-525-6285
http://www.equifax.com/
Experian
Order Credit Report: 888-397-3742
Report Fraud: 888-397-3742
http://www.experian.com/
Trans Union
Order Credit Report: 800-888-4213
Report Fraud: 800-680-7289
http://www.tuc.com/
Is it ok to max out my credit cards?
No - you should try your best to keep your balances 35% below the limit. Try never to let the credit card balance exceed 50% of the credit limit.
Maintaining room on your credit cards can improve your credit scores if you do not abuse them and if you have no more than three. Of course, making your payments on time will also help increase your scores.
I paid off the collection agency, why is it on my report still?
Paying a collection debt doesn’t mean it automatically be removed from your credit report. What it does mean is that now it will be reported as a "Paid Collection".
Will credit counseling services pay off my debts?
A consumer credit counseling service will help you get out from under credit card debt, but it's your money, not their money, that gets the job done.
A credit counseling service will negotiate with your creditors to arrange a repayment schedule and may be able to lower the interest rate on your credit cards. Using a credit counseling service can affect your credit rating because your creditors will note that your bills are not being paid according to the original credit terms.
That said, there is less stigma attached to credit counseling than there would be to a bankruptcy showing up on your credit report. Consider credit counseling if you can't figure a way out from under your current debt load.
Remember that even though most credit counseling services are nonprofit organizations, that doesn't mean that they won't charge a fee for their services. Most agencies get at least part of their compensation in payments from your creditors.
A credit counseling service will negotiate with your creditors to arrange a repayment schedule and may be able to lower the interest rate on your credit cards. Using a credit counseling service can affect your credit rating because your creditors will note that your bills are not being paid according to the original credit terms.
That said, there is less stigma attached to credit counseling than there would be to a bankruptcy showing up on your credit report. Consider credit counseling if you can't figure a way out from under your current debt load.
Remember that even though most credit counseling services are nonprofit organizations, that doesn't mean that they won't charge a fee for their services. Most agencies get at least part of their compensation in payments from your creditors.
